Gov. Andrew Cuomo AP photo

Gov. Andrew Cuomo is proposing two state budgets — one which uses $6 billion in aid from the federal government and one with $15 billion aid from the federal government.

Cuomo said the budget with the larger aid will help avoid further spending cuts and tax hikes, which he says will make it harder for the economy to turn around and one.

On Monday, Cuomo gave his annual budget presentation virtually. In it, he noted that New York is “tired of being a donor state” and called on the federal government to fund the war on COVID-19, like it would fund any war. “No state puts in more and gets back less,” he said. “New Yorkers deserve and demand fairness.”

Cuomo also threatened legal action against the federal government if it doesn’t provide New York $15 billion in COVID relief.

From a practical standpoint, Cuomo’s proposed budget only assumes the $6 billion in federal aid. In order to cover the rest of the $9 billion, Cuomo said New York will need to borrow, raise taxes and slash state spending for local governments and social services. He said New York would spend $600 million less on Medicaid and continue $900 million in 5% across-the-board spending reductions.

According to Robert Mujica, state budget director, the budget with only $6 billion in federal funds will increase taxes on the top 1% residents and they will be the highest taxed residents in the country. He is concerned that will drive residents out of the state.

Currently, the top 5% of New York residents pay 61.8% of the total personal income tax liability. The remaining 95% residents cover the remaining 38.2%.

Even raising taxes on the top earners in the state will only generate $1.5 billion and the state has a $15 billion deficit, said Cuomo.

President-Elect Biden has proposed a $1.9 trillion stimulus package. In it, Biden has $350 billion for local and state governments. He has not said how the money will be spent among the various governments.

Cuomo noted that if New York gets $15 billion, that would only be 4.3 % of the $350 billion, and New York has 5.9% of the population in the country.

The proposed budget also assumes $500 million in mobile sports betting and $350 million from a tax on marijuana. Both items need approval from the state Legislature before being legalized in New York.

After his budget presentation, Justin Wilcox, the executive director of Unshackle New York issued a statement, noting the “employer-centric recovery proposals reflect the importance of helping small businesses recover and rehiring workers. While these proposals are a solid first step, we need to go much further. Advancing broad-based tax relief, regulatory reforms and COVID-related protections will give struggling employers much-needed relief during this critical time.”

However, Wilcox warned against large tax hikes, new fees and other regressive measures. “Chasing away taxpayers and employers will only worsen the state’s economic crisis. That’s not what New York needs right now. It’s time to embrace pro-growth policies that will rebuild our economy and revive our communities,” he said.

The budget year runs from April 1 to March 31. Cuomo said that if the state legislature does not adopt a budget by April 1, there will be no pay raises for either the executive or legislative branches of government.